As everyone is gearing for the January 1, 2021 implementation of pooled employer plans (PEPs), I keep on insisting that this won’t be the game-changer that everyone hopes.

I think PEPs are a great idea, it finally eliminated the silly Department of Labor (DOL) advisory opinion on Open Multiple Employer Plans (MEPs). I caution that many advisory firms and other plan providers want their PEP. The caution is that like the days of Open MEPs, most of these will fail in accruing enough assets for them to be more cost-effective than a single employer plan solution. If a PEP (like the old Open MEP) doesn’t have enough participants and assets, that annual audit starts to become an albatross around the neck of the plan and the participants who might have to pay $50-100 a head just for the audit.

The most successful PEPs will be those MEPs that make the switch over to become MEPs for more flexibility in plan administration and recruiting adopting employers. Rather than each advisory firm getting their PEP, I suggest looking at larger existing PEPs that will allow these advisors to offer a white label solution and fund menu for their clients. Why try to invent the wheel, when something more cost-effective and workable is out there? Just my two cents.